- Revenue came to €5.805 billion, up 13.8%. Organic growth1
was 6.6% (target revised in July 2023 to “at least 6%”).
- Operating margin on business activity came in at 9.4%, up
0.5 points from 2022 (target: “slightly over 9%”).
- Free cash flow was very strong at €390.2 million, equating
to 6.7% of revenue, significantly exceeding the initial target (“at
least €300 million”).
- Net profit attributable to the Group came to €183.7 million
(€247.8 million in 2022). It included an €89 million non-recurring
impairment charge on Sopra Banking Software, with no impact on cash
or on the dividend proposed in respect of financial year
2023.
- Proposed dividend in respect of financial year 2023: €4.65
per share (€4.30 for 2022).
Regulatory News:
At its meeting on 21 February 2024 chaired by Pierre
Pasquier, Sopra Steria Group (Paris:SOP) SA’s Board
of Directors approved the financial statements for the financial
year ended 31 December 20232.
Sopra Steria: 2023 consolidated full-year results
2023
2022
Amount
Margin
Change
Amount
Margin
Key income statement items
Revenue
€m
5,805.3
13.8%
5,101.2
Organic Growth
%
+6.6%
Operating profit on business activity
€m
548.2
9.4%
21.0%
453.1
8.9%
Profit from recurring operations
€m
467.2
8.0%
17.5%
397.6
7.8%
Operating profit
€m
329.9
5.7%
-8.7%
361.3
7.1%
Net profit attributable to the Group
€m
183.7
3.2%
-25.9%
247.8
4.9%
Weighted average number of shares in
issue
m
20.22
-0.2%
20.26
excl. treasury shares
Basic earnings per share
€
9.08
-25.7%
12.23
Recurring earnings per share
€
15.51
13.6%
13.66
Key
balance sheet items
31/12/2023
31/12/2022
Net
financial debt
€m
946.0
522.5%
152.0
Equity attributable to the Group
€m
1,876.7
1.4%
1,850.3
*Alternative performance measures are defined
in the glossary at the end of this document
_________________________________ 1 Alternative performance
measures are defined at the end of this document. 2 Audit
procedures have been carried out and the audit report is being
issued.
Cyril Malargé, Chief Executive Officer of Sopra Steria Group,
commented:
“Thanks to the commitment of our 56,000 employees, who work hard
every day to advance their clients’ digital transformation, Sopra
Steria performed very well in financial year 2023. I’d like to
commend all our teams on the results they achieved as we
comfortably reached the financial targets we had set for
ourselves.
We made significant headway with a range of transformative
initiatives: developing our Consulting business, shifting our
technology solutions further up the value chain, gradually
adjusting our operating model, reinforcing our human resources
policy and boosting our operational efficiency. We plan to keep
scaling up our efforts in these areas over the coming quarters.
In the first half of 2023, we launched rAIse: a large-scale
programme to embrace generative AI, which will feed into our
internal development tools, our partnership strategy and everything
our business consulting teams do.
With the acquisition of CS Group, we have considerably
strengthened our positions in Defence & Security and
established a presence in the Space segment which has substantial
growth potential. The acquisitions of Tobania and Ordina have given
us a key presence in the Benelux market, with over 4,000 employees
and around €700 million in revenue on a full-year basis.
Lastly, I’m very proud to share that Sopra Steria has once again
made the CDP3 A List – recognising the world’s most transparent and
most proactive companies in the fight against climate change – for
the 7th year in a row.
Our priorities for 2024 are clear: successfully integrate the
companies we have acquired, execute the recently announced plan to
dispose of our banking software activities, speed up our internal
transformation initiatives and boost our performance.”
Details on 2023 operating performance
Consolidated revenue totalled €5,805.3 million, an
increase of 13.8%. Changes in scope had a positive impact of €420.6
million, and currency fluctuations had a negative impact of €74
million. At constant scope and exchange rates, revenue growth was
6.6%.
Operating profit on business activity came to €548.2
million, up 21.0% relative to 2022. The operating margin on
business activity increased by 0.5 points to 9.4% (8.9% in
2022).
In France (41% of the Group total), revenue grew sharply
(16.9%) to €2,384.3 million. CS Group was consolidated in Sopra
Steria’s accounts for ten months and contributed €257.4 million in
revenue, posting 10.2% growth. Excluding changes in scope, organic
growth came to 5.0%. Growth continued – albeit at a slower pace –
in the fourth quarter, with organic growth running at 2.3%. The
year’s best‑performing vertical markets overall were defence,
aerospace and transport. The operating margin on business activity
came to 9.6% (10.0% in 2022). As expected, the consolidation of CS
Group had a dilutive effect on the operating margin on business
activity for the financial year. The benefits of operational
complementarities are expected to show up from 2024.
Revenue for the United Kingdom (16% of the Group total)
was €940.9 million, representing organic growth of 7.7%, driven by
the aerospace, defence and security sector, which posted growth of
23.1%, as well as by NHS SBS and SSCL, the two business process
services platforms for the public sector, which posted growth of
9.7% and 15.3%, respectively. The private sector posted full-year
growth of 2.4%. The reporting unit’s operating margin on business
activity improved by 0.5 points to 11.0%.
The Other Europe reporting unit (30% of the Group total)
posted revenue growth of 18.6% to €1,746.9 million. At constant
scope and exchange rates, revenue grew 8.8%. The fastest growth was
seen in Scandinavia and Spain, which both posted double-digit
growth. Following the consolidation of Ordina in the final quarter
of 2023, Benelux contributed €309.7 million to full-year revenue,
representing organic growth of 5.3%. The reporting unit’s overall
operating margin on business activity was 8.7%, up 2.5 points from
2022 (6.2%).
__________________________________ 3 Every year, around 21,000
companies and organisations around the world provide details on
their environmental performance to CDP for independent assessment
against its scoring methodology for the benefit of investors,
purchasers and other stakeholders.
Revenue for Sopra Banking Software (8% of the Group
total) came to €445.1 million, representing organic growth of 4.8%,
driven in particular by the digital solutions offered by Sopra
Banking Platform and Sopra Financing Platform. This resulted in a
9.8% increase in subscription revenue. Software revenue was up 4.2%
while services revenue grew 5.8%. The operating margin on business
activity came to 5.4%, as anticipated, equating to a moderate
decline from 6.5% in 2022.
The Other Solutions reporting unit (5% of the Group
total) posted revenue of €288.2 million, representing organic
growth of 5.9%. The Human Resources Solutions business grew by
6.7%. Property Management Solutions posted a 4.1% increase in
revenue. The operating margin on business activity grew 0.7 points
to 13.7% (13.0% in 2022).
Comments on the components of net profit attributable to the
Group in 2023
Profit from recurring operations came in at €467.2
million, equating to growth of 17.5%. It included a €43.0 million
share‑based payment expense, the increase in which was mainly due
to the increase in the Sopra Steria share price in financial year
2023. It also included a €38.0 million amortisation expense on
allocated intangible assets.
Operating profit came to €329.9 million (compared with
€361.3 million in 2022), after a net expense of €137.4 million for
other operating income and expenses (€36.3 million in 2022), which
included an €89 million asset impairment charge on Sopra Banking
Software. This non-recurring charge has no impact on cash or on the
dividend proposed in respect of financial year 2023.
Net interest expense was €35.9 million (versus €14.4
million in 2022), driven by the increase in financial debt relating
to financing for acquisitions and higher interest rates.
The tax expense totalled €111.7 million, for an effective
tax rate of 38.0%. Restated for non-recurring items, the normative
tax rate for 2023 is estimated at 25%.
Net profit from associates amounted to profit of €6.7
million (compared with an expense of €14.7 million in 2022).
Minority interests totalled €5.4 million. As SSCL is now
wholly owned, following the acquisition of the remaining 25% stake
previously held by the UK Cabinet Office, no non-controlling
interests were recognised.
Net profit attributable to the Group came to €183.7
million (€247.8 million in 2022).
Restated for the impairment charge on Sopra Banking Software,
net profit attributable to the Group would have been €272.7 million
in 2023, 10.0% higher than in 2022.
Basic earnings per share came to €9.08 (€12.23 in
2022).
Restated for asset impairment, basic earnings per share would
have been €13.48.
Proposed dividend in respect of financial year 2023
At the next General Meeting of Shareholders4, Sopra Steria will
propose the payment of a dividend of €4.65 per share, vs €4.30 per
share in respect of financial year 2022.
Financial position at 31 December 2023
Free cash flow was very strong, at €390.2 million, in
particular due to a 21.2% increase in EBITDA, strict management of
the average payment period of trade receivables and early net
inflows.
Net financial debt totalled €946.0 million. It included
the impact of outflows related to the acquisitions of CS Group,
Tobania, Ordina and SSCL. As at end-December 2023, it was equal to
49.1% of equity and 1.5x pro forma EBITDA for 2023 before the
impact of IFRS 16 (with the financial covenant stipulating a
maximum of 3x).
_________________________________ 4 General Meeting to be held
on Tuesday, 21 May 2024. The ex-dividend date will be 28 May 2024.
The dividend will be payable as from 30 May 2024.
Strategy
Sopra Steria’s business model is focused on independence and
sustainable value creation for its stakeholders.
Sopra Banking Software’s software business – developed since
2012 based on Sopra’s legacy banking software assets and
acquisitions – is not a core strategic priority for a European
digital services company like Sopra Steria. As such, the Group is
clarifying its strategy with the announcement of the plan to
refocus on digital services and solutions and to dispose of its
banking software activities (see press release published yesterday
evening at 6:15 p.m.).
This decision reflects Sopra Steria’s aim to expand its
development of digital services and solutions in Europe and focus
its investments on consulting and digital technology in its
strategic markets: financial services, defence & security,
aeronautics, space and the public sector. The Group’s ambition is
to become a compelling European alternative to global providers,
particularly with regard to issues of digital sovereignty, for
major European clients in its strategic markets.
Over the course of financial year 2024, the Group will draw up a
new strategic plan for 2025–2027, with details and financial
targets to be announced at a Capital Market Day in early December
2024.
Workforce
At end-December 2023, the Group’s net headcount came to
55,833 employees, compared with 49,690 employees at year-end 2022.
A total of 9,202 staff were employed at international service
centres.
The workforce attrition rate was 14.0%, compared
with 17.0% in 2022.
Social and environmental footprint
Sopra Steria sees its contribution to society as sustainable,
human-focused and purposeful, guided by the firm belief that
making digital solutions work for people is a source of opportunity
and progress.
With regard to the environment, CDP confirmed in February
2024 that Sopra Steria had made its A List – recognising the
world’s most transparent and most proactive companies in the fight
against climate change – for the 7th year in a row. This
recognition notably reflects the Group’s new Net-Zero target5 of
achieving a 52% reduction in its greenhouse gas emissions from
Scopes 1 & 2 and a 37.5% reduction for Scope 3 by 2030. As at
end-December 2023, the Group had achieved a 63.6% reduction in
Scope 1 & 2 emissions and a 9.8% reduction in Scope 3
emissions. The Group’s energy consumption, for example, was reduced
by 20% relative to 2021.
In the social arena, progress was made on the Group’s
gender equality policy in 2023, with a 0.4-point increase in the
proportion of women in the workforce (33.5%), a higher proportion
of women hired and promoted, and a 1.1 point increase in the
proportion of women in the 10% most senior positions (21.5%).
With regard to human resources, the annual Great Place To
Work survey conducted in 2023 found that 77% of employees say Sopra
Steria is a great place to work, making the vast majority of the
Group’s entities eligible for Great Place to Work®
certification.
___________________________________ 5 Target approved by the
Science Based Targets initiative (SBTi) on 16 June 2023 and aligned
with the aim of limiting the increase in the average global
temperature to 1.5°C (reduction targets baseline: 2019).
Targets for 2024
- Organic revenue growth of between 2% and 4%, including a
relatively stable Q1
- Operating margin on business activity of between 9.5% and
10.0%, including a dilutive effect of around 0.2 points related to
recent acquisitions
- Free cash flow in excess of €350 million
Meeting to report 2023 full-year results
The 2023 full-year results will be presented to financial
analysts and investors in a French/English webcast on Thursday, 22
February 2024 at 8:30 a.m. CET.
- Register for the French-language webcast
here - Register for the English-language webcast here
Or by phone:
- French-language phone number: +33 (0)1 70
37 71 66 - English-language phone number: +44 (0)33 0551 0200
Practical information about the presentation and webcast can be
found in the ‘Investors’ section of the Group’s website:
https://www.soprasteria.com/investors
Upcoming financial releases
Friday, 26 April 2024 (before market open): Publication of Q1
2024 revenue
Tuesday, 21 May 2024 (2:30 p.m.): General Meeting of
Shareholders
Wednesday, 24 July 2024 (after market close): Publication of H1
2024 results
Thursday, 31 October 2024 (before market open): Publication of
Q3 2024 revenue
Glossary
- Restated revenue: Revenue
for the prior year, expressed on the basis of the scope and
exchange rates for the current year.
- Organic revenue growth:
Increase in revenue between the period under review and restated
revenue for the same period in the prior financial year.
- EBITDA: This measure, as
defined in the Universal Registration Document, is equal to
consolidated operating profit on business activity after adding
back depreciation, amortisation and provisions included in
operating profit on business activity.
- Free cash flow: Net cash
from operating activities; less investments (net of disposals) in
property, plant and equipment, and intangible assets; less lease
payments; less net interest paid; and less additional contributions
to address any deficits in defined-benefit pension plans.
- Operating profit on business
activity: This measure, as defined in the Universal
Registration Document, is equal to profit from recurring operations
adjusted to exclude the share-based payment expense for stock
options and free shares and charges to amortisation of allocated
intangible assets.
- Profit from recurring
operations: Operating profit before other operating
income and expenses, which includes any particularly significant
items of operating income and expense that are unusual, abnormal,
infrequent or not foreseeable, presented separately in order to
give a clearer picture of performance based on ordinary
activities.
- Basic recurring earnings per
share: This measure is equal to basic earnings per share
before other operating income and expenses net of tax.
- Return on capital employed
(RoCE): (Profit from recurring operations after tax +
Profit from equity-accounted companies) / (Equity + Net financial
debt).
- Downtime: Number of days
between two contracts (excluding training, sick leave, other leave
and pre-sales) divided by the total number of business days.
Disclaimer
This document contains forward-looking information subject to
certain risks and uncertainties that may affect the Group’s future
growth and financial results. Readers are reminded that licence
agreements, which often represent investments for clients, are
signed in greater numbers in the second half of the year, with
varying impacts on end-of-year performance. Actual outcomes and
results may differ from those described in this document due to
operational risks and uncertainties. More detailed information on
the potential risks that may affect the Group’s financial results
can be found in the 2022 Universal Registration Document filed with
the Autorité des Marchés Financiers (AMF) on 17 March 2023 (see
pages 40 to 45 in particular). Sopra Steria does not undertake any
obligation to update the forward-looking information contained in
this document beyond what is required by current laws and
regulations. The distribution of this document in certain countries
may be subject to the laws and regulations in force. Persons
physically present in countries where this document is released,
published or distributed should enquire as to any applicable
restrictions and should comply with those restrictions.
About Sopra Steria
Sopra Steria, a major Tech player in Europe with 56,000
employees in nearly 30 countries, is recognised for its consulting,
digital services and software development. It helps its clients
drive their digital transformation and obtain tangible and
sustainable benefits. The Group provides end-to-end solutions to
make large companies and organisations more competitive by
combining in-depth knowledge of a wide range of business sectors
and innovative technologies with a fully collaborative approach.
Sopra Steria places people at the heart of everything it does and
is committed to putting digital to work for its clients in order to
build a positive future for all. In 2023, the Group generated
revenue of €5.8 billion. The world is how we shape it. Sopra
Steria (SOP) is listed on Euronext Paris (Compartment A) – ISIN:
FR0000050809 For more information, visit us at
www.soprasteria.com
Annexes
Sopra Steria: Impact on revenue of changes in scope and exchange
rates – FY 2023 €m
2023
2022
Growth
Revenue
5,805.3
5,101.2
+13.8%
Changes in exchange rates
-74.0
Revenue at constant exchange rates
5,805.3
5,027.2
+15.5%
Change in scope
420.6
Revenue at constant scope and exchange rates
5,805.3
5,447.9
+6.6%
Sopra Steria: Changes in exchange rates – FY 2023
For €1 / %
Averagerate2023 Averagerate2022 Change Pound
sterling
0.8698
0.8528
-2.0%
Norwegian krone
11.4248
10.1026
-11.6%
Swedish krona
11.4788
10.6296
-7.4%
Danish krone
7.4509
7.4396
-0.2%
Swiss franc
0.9718
1.0047
+3.4%
Sopra Steria: Revenue
by reporting unit (€m / %) – Q4 2023
Q4 2023
Q4 2022
Restated*
Q4 2022
Organic growth
Total growth
France
617.5
603.6
537.4
+2.3%
+14.9%
United Kingdom
249.1
220.0
219.1
+13.2%
+13.7%
Other Europe
548.9
511.1
393.0
+7.4%
+39.7%
Sopra Banking Software
124.7
117.0
117.1
+6.7%
+6.5%
Other Solutions
79.6
73.8
73.8
+7.8%
+7.8%
Sopra Steria Group
1,619.8
1,525.5
1,340.5
+6.2%
+20.8%
* Revenue at 2023 scope and exchange rates
Sopra Steria: Revenue by reporting unit (€m
/ %) – FY 2023
2023
2022
Restated*
2022
Organic growth
Total growth
France
2,384.3
2,271.7
2,039.0
+5.0%
+16.9%
United Kingdom
940.9
873.3
890.6
+7.7%
+5.6%
Other Europe
1,746.9
1,606.1
1,473.0
+8.8%
+18.6%
Sopra Banking Software
445.1
424.6
426.5
+4.8%
+4.3%
Other Solutions
288.2
272.2
272.1
+5.9%
+5.9%
Sopra Steria Group
5,805.3
5,447.9
5,101.2
+6.6%
+13.8%
* Revenue at 2023 scope and exchange rates
Sopra Steria:
Performance by reporting unit – FY 2023
2023
2022
€m % €m %
France Revenue
2,384.3
2,039.0
Op. profit on business activity
229.5
9.6%
204.4
10.0%
Profit from recurring operations
196.8
8.3%
187.0
9.2%
Operating profit
189.4
7.9%
167.9
8.2%
United Kingdom Revenue
940.9
890.6
Operating profit on business activity
103.2
11.0%
93.8
10.5%
Profit from recurring operations
89.4
9.5%
80.7
9.1%
Operating profit
79.1
8.4%
91.6
10.3%
Other Europe Revenue
1,746.9
1,473.0
Operating profit on business activity
152.2
8.7%
91.9
6.2%
Profit from recurring operations
140.0
8.0%
85.6
5.8%
Operating profit
118.1
6.8%
72.3
4.9%
Sopra Banking Software Revenue
445.1
426.5
Operating profit on business activity
23.9
5.4%
27.6
6.5%
Profit from recurring operations
4.5
1.0%
11.1
2.6%
Operating profit
-92.9
-20.9%
-1.1
-0.3%
Other Solutions Revenue
288.2
272.1
Operating profit on business activity
39.4
13.7%
35.4
13.0%
Profit from recurring operations
36.6
12.7%
33.2
12.2%
Operating profit
36.2
12.6%
30.6
11.3%
Sopra Steria: Consolidated income statement – FY 2023
2023
2022
€m % €m %
Revenue
5,805.3
5,101.2
Staff costs
-3,577.1
-3,150.5
Operating Expenses
-1,501.4
-1,355.9
Depreciation, amortisation and provisions
-178.6
-141.7
Operating profit on business activity
548.2
9.4%
453.1
8.9%
Share-based payment expenses
-43.0
-23.2
Amortisation of allocated intangible assets
-38.0
-32.3
Profit from recurring operations
467.2
8.0%
397.6
7.8%
Other operating income and expenses
-137.4
-36.3
Operating profit
329.9
5.7%
361.3
7.1%
Cost of net financial debt
-19.5
-8.7
Other financial income and expenses
-16.3
-5.7
Tax expense
-111.7
-83.2
Net profit from associates
6.7
-14.7
Net profit
189.1
3.3%
249.0
4.9%
Attributable to the Group
183.7
3.2%
247.8
4.9%
Non-controlling interests
5.4
1.2
Weighted average number of shares in issue excl. treasury
shares (m)
20.22
20.26
Basic earnings per share (€m)
9.08
12.23
Sopra Steria: Change in net financial debt (€m) – FY
2023 2023 2022
Operating
profit on business activity
548.2
453.1
Depreciation, amortisation and provisions (excluding
allocated intangible assets)
176.1
144.4
EBITDA
724.3
597.5
Non-cash items
0.4
5.4
Tax paid
-82.6
-87.8
Change in current operating working capital requirement
44.9
6.1
Reorganisation and restructuring costs
-62.8
-17.8
Net cash flow from operating activities
624.2
503.4
Change relating to investing activities
-93.7
-94.1
Lease payments
-106.0
-94.5
Net interest
-22.0
-8.6
Additional contributions related to defined-benefit pension
plans
-12.3
-18.9
Free cash flow
390.2
287.2
Capital increases
0.0
0.0
Impact of changes in scope
-1,049.2
-13.8
Financial investments
-11.8
-8.7
Dividends paid
-94.5
-71.6
Dividends received from equity-accounted companies
2.7
2.8
Purchase and sale of treasury shares
-26.1
-17.5
Impact of changes in foreign exchange rates
-5.2
-3.4
Other changes
0.0
0.0
Change in net financial debt
- 794.0
175.1
Net financial debt at beginning of
period
152.0
327.1
Net financial debt at end of period
946.0
152.0
Sopra Steria: Simplified balance sheet (€m) –
31/12/2023 31/12/2023
31/12/2022 Goodwill
2,668.9
1,943.9
Allocated intangible assets
124.8
108.3
Other fixed assets
304.3
261.3
Right-of-use assets
457.1
359.9
Equity-accounted investments
185.9
183.5
Fixed assets
3,740.9
2,857.0
Net deferred tax
98.3
58.5
Trade accounts receivable (net)
1,372.4
1,104.2
Other assets and liabilities
-1,556.4
-1,347.6
Working capital requirement (WCR)
-184.0
-243.4
Assets + WCR
3,655.2
2,672.1
Equity
1,925.1
1,893.4
Pensions – Post-employment benefits
167.8
137.7
Provisions for contingencies and losses
113.3
98.5
Lease liabilities
503.0
390.5
Net financial debt
946.0
152.0
Capital invested
3,655.2
2,672.1
Sopra Steria: Workforce breakdown –
31/12/2023 31/12/2023
31/12/2022 France
21,758
19,822
United Kingdom
7,779
7,440
Other Europe
16,534
12,583
Rest of the World
560
435
X-Shore
9,202
9,410
Total
55,833
49,690
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221944210/en/
Investor Relations Olivier Psaume
olivier.psaume@soprasteria.com +33 (0)1 40 67 68 16 Press
Relations Caroline Simon (Image 7) caroline.simon@image7.fr +33
(0)1 53 70 74 65
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